Editorial: Party funding reform overdue

As we have seen before in our country, there is nothing like the looming loss of power to get people to focus on ways of curbing its abuse.

Mathews Phosa was the man who, when he took over as ANC treasurer nearly five years ago, promised the ANC would extract Chancellor House from its involvement with Hitachi Power Africa. This came after the Mail & Guardian exposed Chancellor House as the party's investment vehicle and raised awkward questions about the company's benefit from a massive contract with a state-owned company, Eskom.

Chancellor House holds 25% in Hitachi Power Africa, which in 2007 was awarded a R40-billion boilers tender for the new Medupi and Kusile power stations.

The public protector later found that then-Eskom chair Valli Moosa had failed to recuse himself from the process, despite a conflict of interest arising out of his service on the ANC's finance committee.

Nothing wrong
Despite the controversy, Phosa was overruled by party barons – notably ANC secretary general Gwede Mantashe – who saw nothing wrong with the ruling party doing business with the state.

Now the M&G has established that Chancellor House is benefiting from yet another multibillion rand Eskom contract in spite of the Hitachi controversy.

Eskom awarded a R2-billion contract for material handling at Kusile to engineering company Bateman Africa in November 2010.

Chancellor House has a 10% shareholding in Bateman Africa.

To his credit, Phosa put the party funding issue back on the agenda at the ANC's recent policy conference and – as we report elsewhere – the party has adopted some progressive new policy recommendations.
They include an increase in the taxpayer's contribution to political parties, disclosure of private donors and the regulation of political parties' investment arms.

Regulated to avoid abuse
The conference also agreed that foreign funding should be allowed, but "must be regulated to avoid abuse and manipulation by external forces in the political affairs of our country".

Yet the party has made such promises before.

When the Institute for Democracy in Africa went to court in 2003 to try to compel the ANC and other parties to disclose their private funders, part of the ANC's successful defence was a promise that draft legislation to regulate private party funding would be tabled in Parliament in the near future.

We are still waiting.

Studies have shown that dominant party control of access to resources is a key barrier to genuine multiparty democracy. Hard as it might be to let go of the easy money, the ANC should grasp the party funding nettle now.